Sigma-Aldrich Corporation v. Omar Vikin
39 I.E.R. Cas. (BNA) 362, 2014 Mo. App. LEXIS 1136, 451 S.W.3d 767 (2014)
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Rule of Law:
A non-compete agreement is unenforceable if it lacks a geographic limitation and is not narrowly tailored to protect a legitimate business interest, such as trade secrets or customer contacts. Information does not qualify as a trade secret if it is publicly known, generally known within an industry, or easily duplicated.
Facts:
- In 2006, Sigma-Aldrich Corp. ('Sigma') hired Omar Vikin ('Defendant'), who had previously worked for a competitor, VWR.
- On February 24, 2006, as a condition of employment, Vikin signed an agreement containing a two-year non-compete provision.
- The provision prohibited Vikin from working for any business that was competitive with a product, process, or service he worked on or had confidential information about, anywhere Sigma markets or sells such products.
- During his employment, Vikin worked on various projects, including the development and implementation of an online marketplace called 'Science Place' and an associated 'Aggregation Business Plan'.
- Vikin had prior knowledge of a similar web aggregation strategy from his employment at VWR before he joined Sigma.
- On July 15, 2013, Vikin resigned from Sigma to accept a position as General Manager of Americas at Alfa Aesar ('Alfa'), a competitor.
- Vikin's role at Alfa was an operational oversight position focused on supply chain, compliance, and personnel, and did not involve web design or digital marketing.
- Alfa did not have a business model similar to Sigma's 'Science Place'.
Procedural Posture:
- Sigma-Aldrich Corp. filed a petition in St. Louis County Circuit Court (trial court) seeking to enjoin Omar Vikin from working for Alfa Aesar.
- The trial court initially granted Sigma's motion for a temporary restraining order (TRO).
- Following a hearing, the trial court denied Sigma's petition for a preliminary injunction and dissolved the TRO.
- Sigma then requested a permanent injunction, which the trial court denied in a final judgment, holding the non-compete agreement to be unenforceable.
- Sigma (Appellant) appealed the trial court's final judgment to the Missouri Court of Appeals, Eastern District, with Omar Vikin as the Respondent.
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Issue:
Is a non-compete agreement that prohibits a former employee from working for any competitor globally in any capacity, without a specific geographic limitation and without protecting legitimate trade secrets, enforceable under Missouri law?
Opinions:
Majority - Richter, J.
No. A non-compete agreement that prohibits a former employee from working for any competitor globally in any capacity, without a specific geographic limitation and without protecting legitimate trade secrets, is an unreasonable and unlawful restraint on competition and is therefore unenforceable. The court found the agreement's lack of a geographic limitation rendered it an overly broad global prohibition on competition. Unlike enforceable agreements that lack geographic limits but are narrowly tailored to prohibit soliciting specific customers, this agreement attempted to ban Vikin from working for any competitor in any capacity. Furthermore, the court determined that the information Sigma sought to protect—its 'Science Place' and 'Aggregation Business Plan'—did not qualify as trade secrets. The court reasoned that these strategies were not secret because they were publicly implemented, a competitor (VWR) had already invented a similar strategy that Vikin was aware of, and the information was not difficult to duplicate. Because the agreement was geographically overbroad and did not protect a legitimate interest beyond preventing 'mere competition,' it is unenforceable.
Analysis:
This decision reinforces the strict judicial scrutiny applied to non-compete agreements in Missouri, emphasizing that they must be narrowly tailored to be enforceable. The case clarifies that the absence of a specific geographic limitation is generally fatal unless the restriction is tightly focused on other aspects, such as prohibiting the solicitation of specific, known customers. It also provides a clear application of the multi-factor test for trade secrets, illustrating that business strategies, once public or known within an industry, lose their protected status. This precedent makes it more difficult for employers to enforce broad, non-geographic restrictive covenants and places a high burden on them to prove they are protecting genuine, confidential trade secrets rather than simply stifling competition from former employees.
